WASHINGTON, D.C. – Fannie Mae announced yesterday that positive rental payment history will be considered in its automated underwriting system starting on September 18.
Center for Responsible Lending President Mike Calhoun said, “The housing system is replete with inequitable barriers that prevent credit-worthy renters of color and low-income renters from becoming homeowners, denying them a primary path for building family wealth. Fannie Mae’s step to incorporate positive rental payment history into its underwriting platform removes a significant barrier, responsibly expanding access to mortgage credit and the economic opportunities that accompany sustainable homeownership.”
Calhoun added, “Even with this important step forward, it remains too difficult for renters to save for a down payment and to qualify for a mortgage. Among the policies needed for additional progress, Congress should include downpayment assistance for first-generation homebuyers in the budget reconciliation package.”
According to Fannie Mae research:
- Around 20% of the U.S. population has little established credit history, a group in which Black and Latino consumers are disproportionately represented;
- Black consumers identify insufficient credit score or credit history as their single biggest obstacle to getting a mortgage with 29% of Black consumers doing so, as compared to 18% of white consumers;
- In a recent study of mortgage applicants who were not recommended by Fannie Mae’s underwriting system, 17% could have been approved if their rental history been considered.
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